tv Fast Money Halftime Report CNBC August 28, 2012 12:00pm-1:00pm EDT
its pc division, and that the level of debt is preventing any new acquisitions. that's it for us here on "squawk on the street. "owe let's get back to the fast money halftime report. the markets are flat. despite the fact that it is so quiet this week, and all these people who are vacation and the markets are on hold before the ecb chief and the highly anticipated chief on friday, our traders are are not. they are making big bets ahead of what could be one of the most volatile septembers on record for the markets. we're going to trade all the big movers today with joe, john, and josh. josh, what is on your radar right now? >> i'll tell you something interesting. you know, we abandoned all these defensive sectors during some of june and most of july and then a lot of august, and now all of a sudden these things are set up really well. the one i want to call attention
to is the health care etf, xlv. it gives you the whole sector. this thing looks like it's poised to break out. it's bumped up against the same 38 1/2, 39 resistance. once it goes, this could go right into the mid40s. i think it's a really great relatively conservative way to add stock exposure if you are lagging here. >> all right. health care for josh brown. mr. new world, what do you think? >> what am i looking at? look, i think when you look at the marketplace right now and last week we had this correction down. a lot of folks remain incredibly bearish, and he think the market continues to trade in a very resilient fashion near the highs. now, what has worked will continue to work. there's an expression. the trend is your friend. what has worked all year? financials. let me give you specific names. you've got the deal yesterday. m & t goes out and buys hudson citibank. take a look at wind trust financial out in john's neck of the woods. chicago. wtfc. that's the name that i think will continue to work. then look back domestically
here. the consumer discretionary names. think about the summer season and about how well a cabella he's hibet's did or dick's sporting goods. now look forward. you have back to school season. what do i like there? i like gap. i like urban outfitters and mace's, and i like basic and bland target that continues to work. the trend it s your friend. >> is this an opportunity to really put on some trades when a lot of people are asleep and maybe you capture some dislobbyings that weren't expected? >> you sure could, michelle. i think you're going to have an opportunity on friday. it's the only reason most of these pits are going to be filled until friday, and that is, of course, jackson hole. i think we're going to be biding our time and waiting for some moves that we're quite frankly unlikely to get very big moves, until friday. we could then see that and to your point about september being perhaps very volatile. we've seen a lot more
speculation in out of the money call spreads that could imply that september could be a very good month and then the -- there are some folks who are more than willing to either buy protection or bet on the down side into some -- >> for people that have long exposure in the market, buying that put protection is very cheap right here. >> why would you get that right now when you know that historically september is the worst month ever for stocks? >> well, they have been. my point they've been doing that, michelle, for the past two weeks. in fact, they've been stacking on calls out of the money calls in the vix which trades right behind me. they've been doing that. call stupids they call them where they stack one call on top of another. over and over again. now, so far they've been wrong, but i believe they're putting on those positions for well after labor day and pointing more towards end of september into october when the election --
>> call stupids. >> it's more clear. yeah. call stupided. >> joe, i saw you nodding your head knowingly and agreeing. >> well, the dislocations that we've seen in looking at historicals and what month is strong and what month may not be so strong or i think it varies sxr trim to time. i think this is a completely new investment world, and i think actual money managers kind of take that stuff and low it out the window. >> hey, michelle, one thing i'll point out, though, as much as it is a new investment world are and i agree that some aspects of what swroe is trying to get across if you look at this year, it actually lines up exactly like the four-year -- the fourth year election cycle typically does. it's not very different from what history tells us, and if you look at how those years play out, september, october we should get a correction, and then a resumption of the reality where we end up going out at the end of the year at the year's highs, november, december typically very strong.
that's what election years look like, and everything -- >> are you so convinced of that? are you so convincesed of that right now? would you dare short this dull market right here knowing that historically september and october look like that? >> the short trade is very asymmetric because you've got essential bankers around the world poised. i don't know if you want to do that. what we would prefer to do with and what we have done is to add a little bit more cash to the books, trim some areas that have worked out well. there's nothing that we want to outright sell that we own right now, but we do want to make sure we're liquid because, again, this is setting up for a typical election year pattern. september, october should get a little more dicey. we're getting zero activity on a day. 30 points, something.
>> at 1,425-ish, somewhere around there, and you have mashgt that's basically sitting between 1,410 and 1,415 despite all the negative news. we woke up this morning. draghi is not going to jackson hole immediately everyone turned their thoughts to, okay, this market now moves lower. that just doesn't seem to be the case. i think to me looking back as a trader over the years that i have been doing that, that tells you about the future path of the marketplace. >> and i would say that looking at what happened with draghi saying he wasn't diagnose to speak and not going to attend jackson hole, i think a lot of folks believe that that could be because they're giving ben bernanke the stage to say something or to perhaps not say something. that's what he and draghi have done so well. >> central bank civilry. >> yes. they've played that liar's poker very, very well because they've come to the market and they don't just tell you they're going to do something.
they just talk about what they might do, but they don't put anything other than just a drag out into 2014 for low interest rates. >> yeah. so far the job owning seems to be working for draghi. let's bring in herb greenberg. he joins us with more on sales force.com. what do you got? >> michelle, the ink is barely dry on sales force's acquisition about a week or two ago. that was a $700 million deal, and now what shows up in the s.e.c.'s edgar filings, but buddy media insiders are filed a shelf offering on their behalf to sell all the 1.6 million shares they got in this deal, which is about one-third of what the deal costs. most of it came in cash. they're basically saying they can now go out and sell this 1.6 million shares whenever they want. now, what's interesting here is you see these shelf offerings all the time. this is only about 1.2% of all of the shares outstanding of sales force. it's not a big deal in that regard. on the other, you got these insiders saying, you know what, we want the chance to get out
and get out now with the stock at this price. you know, if they thought there was real upside, would they stay? would they be filing this 2340u? would they be sending that message? i don't know. it's certainly worth noting. >> they clearly want to monday ties the acquisition as quickly as possible. >> it seems that way. >> would you agree the same way? >> i think when you look at service as a software industry, i think when you see the deal that ivn did with connectsa, i think there's plenty of tail winds in that space. i think ultimate software, which i talked about yesterday, ulti is a name potentially you want to own here. i think it's going to be a lot of m&a going forward. i think when you look at sales force crm, they continue to deliver solid earnings, and the trajectory appears to be higher. >> by the way, you say solid earnings. i do have to say there are a lot of people out there that question the quality of what you call solid earnings. >> john, you got a trade on this? >> well, with the stock $20 off the 52-week high, michelle, i can certainly understand why the insiders would sell as herb accurately points out, we're
talking around 1% of crm shares. if all of it hit the market. this isn't like what we just saw in facebook or what we're seeing in yelp. it's not at all like that because those are much larger percentage -- >> maybe not size, but in spirit it's -- >> you say that. >> it's -- >> true. in spirit, but, again, these are guys that are looking at it realistically saying the stock is $20 off the high. if i just cashed out to mark bennahoff and could take chips off the table at around this level, i certainly would. >> i'm curious what your thoughts are as far as the bigger, what michelle was alluding to. a year ago if you were to talk to tech people, silicone valley people, they all wanted to be invested. now it seems like liquidity is the word. do you think this is symbolic of that? >> look, what i know is this. mark has had the last laugh so far. when i put this up in my twitter stream and get all the feedback coming bark, there's a lot of people short this stock who think that there is concern here and there's reason to be --
>> and the one just real quick. the one reason to be concerned about the future performance of sales force would be market share gain coming from an sap or coming from an oracle. again, they've done some small deals in the last year or so because they know they have to be in this space. it's about saas. the industry itself. that's where -- >> it's all about the -- >> and -- >> just one last thought, michelle. when peter teal, who has been with facebook for years, decides he wants to dl dump 0% or some of his portfolio, that's a completely different bit of information than when somebody who is just being bought by crm decides, hey, you know what, i'll take my chips off the table. >> what do you think of their portfolio? >> yeah, but they haven't -- but they wasn't seen the inside workings of the company the way he has or the nonworkings therefore in the case of facebook. mroo we're done with this. thanks so much. >> now we're bringing in gina martin adams, senior equity strategist for wells fargo securities. for more on the markets, your
initial thoughts when you heard he wasn't going to be there on saturday? >> i think he is a busy man. obviously, this is really the fed's show. draghi has his own game to run over in europe, and we're really looking forward to hearing what bernanke says or doesn't say and how that might impact the markets going into next week. >> it seems to me the impacts on the markets -- the markets have been pricing in a lot of different markets action, qe3. are we set up for disappointment on friday? >> i think we're going to be disappointed rather than excited by what bernanke had to say. i think a lot of talk, not a lot of action, and quite frankly, that's working. exactly. it's working for better than aink where i. he is pretty happy, quite frankly, about w what's happened. the consumer is doing okay. the market is testing its 2012 highs, and we've had a pretty good first half of the year. inflation is right around 2%. i think the fed operation twists
of q es3, pardon me, is pretty weak right now. >> hey. gina, it's josh brown. the gold market would differ. the gold market is acting as though this is some kind of a slam dunk. it's broken out of a channel. even the minors are performing, and they never do. could you speak to that a little bit? do you think the expectations are getting a little bit overblown? >> i think -- well, first off, the gold market has been through a little bit of a rally, but it's well off of its 2011 peak. that's the question for the industrial metals across the board. they peaked into 2011. that's an important context. gold is confirming what's happened in the equity market, what's happened in the broader commodity complex and heats happened in the treasury market just in the short-term over the last few weeks. everyone has been rallying in anticipation of the fed doing something. that's why i think we might be a little bit disappointed here over the next couple of weeks because i think it's fairly unlikely, quite frankly, that bernanke comes out and does full board with qe3. >> gina, it's joe. our "fast money" colleague in the last couple of months has
referred to the fiscal cliff that's coming as kind of like y2 k. is there good-bye tie grand compromise? is this the same response and reaction we're going to get assist we had with y2k? >> i think quite frankly there's so much uncertainty affiliated with this election in general. and the potential fiscal cliff that you have to get defensive going into this fall. i'm taking advantage of this 10% rally we've seen since early june to get more defensive in portfolios benchmarked to the s&p 500. that's in advance of what is likely to be a volatile september, october period, and then a volatile fourth quarter. i think earnings are going to be quite a bit weaker in early 2013. as a result of at least some of these packages expiring into the end of this year. >> bottom line, this sounds like you're saying go defensive. >> i am. i'm overweight health care. consumer staples and consumer discretionary sector as a defensive play in a market that i think is a little bit too excited about qe and faces a lot
of policy risk in the next six months. >> who wants a big cruise ship like that, anyways? >> pete does. >> thank you so much. holy. you dared to join us here. >> it's wonderful. mcc, i couldn't wait to get out here, but herb slid me out of the seat. he is bigger. >> good to see the horse and buggy still works. >> they shut it down, but they shut it down in the wrong side. they actually shut down my side. >> aren't you coming in by helicopter? >> sometimes. >> guys, i think pete might be double parked in the cnbc parking lot. let's move it along. >> we are glad to have you here. >> it's great to be with you. coming up, unusual activity. not quite pair normal, but enough to raise eyebrows in the financial sector. and the storm looking up higher diesel prices. the impact on trucking stops as a result which have already been battered by rising fuel prices. we'll be right back.
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nook ereader. dr. jay. >> well, it seems like a pretty good partnership, and this is a big electronics retailer. might not be as familiar to u.s. consumers, but this is actually a successful one that is growing in their business overseas, so the fact that the nook will be there is good news for them, michelle. >> u.s. print maker printer maker lexmark plans to cut 1,700 jobs and it is it will shut down its ink jet segment in order to cut costs. shares posting their largest gains of the year on the news. take a look at that. a gain of more than 15%. >> similar structural story we're seeing from canon and xerox. now they're looking at going into value image and software solutions. the chart really tells you what to do here. you have short interests of over 22%. the stock is trading towards the upper end of its range. do i like this on a secular basis? absolutely not. would i sell it today, no i would not. there are farther shorts that have to be unwound.
>> a.k. steel tumbling today. that's after ubs downgraded shares to sell from neutral citing near term down side for price and low cost imports. downtown josh brown. >> yeah. this is like the third downgrade for ak steel in the last ten days. they're slicing this thing to like a $4 target in some cases. $5. i don't think there's a ton of opportunity here because the problem with aksteele is that they have no pricing power. steel prices are down 43% year-over-year just to give you some perspective, and this is really a commodity business. the one caveat and the one thing that could get you in trouble if you stay short is about a quarter of the flow to short right now. they already slashed their dividend and already taken some defensive measures at the company. i don't know how much more down side is left. this is best to avoid, i think. >> okay. the financials among the best performing sector this year.
>> you look at the xlf right now on august 3rd and it had the break-out, it's been above the moving arjdz. ever since you look at wr p morgan, it's been staining or moving above that. the moving averages as well, but it's the august. now, those are august. they expire on friday. it just shows you just how defined people are right now. you look at the 38 calls. that's where they're buying them yesterday. that's where they're buying them today. it's something to keep an eye on as those financials continue to perform. >> you played football in europe? >> played in frankfurt and london and barcelona. >> i thought it was soccer over there? >> no, this was legit american football. >> this is world league football. >> here's what i don't understand. your brother's nickname is dr. jay. >> sure. >> didn't dr. jay play basketball? >> yeah. >> pete and john, you played football, right? >> yeah. a little more football than basketball, michelle. the vertical just wasn't there for me. >> the depth of my knowledge.
okay. golf refineries shut production ahead of tropical storm isaac. 08% halted. that's sure to put upward pressure on gas prices. addison, good to see you. >> thank you. >> how long do you expect to see this impact? >> well, it all depends on just how heavy the rains are that accompany this storm as it comes ashore. there's a lot of refineries just north of new orleans. we're looking at about right now three million barrels of refining capacity. they're in the line of the storm. if those refiners have to deal with days and days of flooding, then, obviously, the impact on prices is sure to last longer. >> on gasoline, not necessarily oil, right? >> on oil it's different. i think oil, because of what's going on in venezuela and the fact that they can't use the oil because the refiners are down is actually more oil coming on to the market than the gulf coast right now. >> that would explain some of the pricing pressure. some folks say they were disappointed that president obama today didn't announce
anything related to the spr, but you were not surprised by that? >> no. it's very difficult right now for the president to talk about the spr, other than to have a spokesman come out every day and try and jawbone it and actually achieve what he is trying to do is to reign in the oil price. what they really need in the run-up to the election is some sort of cover. probably to be provided by the international energy agency and some sort of a coordinated release from global stockpiles. so far the head of the iea isn't playing ball. >> to add on to what addison is saying, it's about distillates and diesel. how are amazed are you at the price of natural gas, and is it a test yamt to the introduction of all these shale plays we're seeing here where now you see production in the gulf really not what it was in 2005? >> sure. ut but i would sound a note of caution. everything he said is true, but the market isn't really sufficiently pricing in what's going to happen here over the next few days. we're probably going to end up with 12 bcf a day. not a day, but 12 bcf to 15 bcf
production off line over the next few days. we're not going to lose 15 bcf a day -- or bcf of demand. you know, there is going to be some reaction. probably comes tomorrow. >> addison, hold on a second. we have the national hurricane center that's just put out their update. isaac is now a category one hurricane. 75-mile-per-hour winds. now officially a hurricane. you can see we haven't changed the title will. tropical storm isaac. we are told now it is absolutely a hurricane as we see the edges of it reaching new orleans. we've got two guys on the ground there. brian schachtman and scott koenig. a lot of rain and wind, et cetera, as this thing barrels its way towards the coast there. once again, isaac is now officially a hurricane. category one. addison, when you look at oil prices for the year, what are you expecting for the price? sfli think we're going to end up affirminging about $93 a barrel on wti. we're trading about there now on average from the beginning of the year. obviously prices are going to be higher and lower between now and the end of the year, but i think
at the end of the day we don't get any military action in the middle east that's going to drive pritsdz higher and certainly the supply demand fundamentals do not justify prices at these levels. we're going to spend time below here as well. >> all right. good to see you. thank you so much. pete, how would you trade the refiners here? >> i'm looking at the refiners. back on june 22nd if you take a look at val era, that's where you had great signals in the option where you had upside call buying. what are you seeing today? more upside call buying. you're seeing more committed folks out there as sfar as valero is concerned. if you look at them sell the october 29 puts. extremely bullish position. i think valero has upside. when you look at phillips, that's a name that's a stealth name. no one ever brings it up, but you look at the way it's performed since the lows of june to where it is presently. september 42 calls. september 43 called. just going back to what addison is saying, if he is correct with
natural gas, it really is the sleeper trade here, and it could move significantly. i don't know if john or peter are seeing anything in the opings world, but it hasn't really responded in the last couple of days. it does have the potential for significant upside. >> the derivative plays off of that are names like sheer energy and some of the other names where we continually see this drumbeat of folks come after him and looking to expect more upside on some of the nat gases. >> coming up, tech giant samsung still has some fight left as it seems to appeal the apple patent decision. what does it mean for the stocks? plus, gold shining over the past three and a half months. we are tracking the precious metal ahead of the key jackson hole speech from bernanke on friday. more halftime report ahead brsh how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers
. go. got it, right? okay. here's the update. we've updated now the screen here. it is now hurricane isaac. national hurricane center coming out upgrading isaac to a hurricane center a tropical storm. it is category one. 75-mile-per-hour winds as we see it approach new orleans. the coast of louisiana there.
let's show you the intraday chart to the price of oil. we saw crude rally intoen anticipation of a speech from president obama at the white house when he came out and did not announce that there would be a release from the spr right about 10:00, 9:45. bam. that's where you saw the price of oil shoot lower. it has since recovered from that, come off the lows and now moving higher perhaps as a result of the national hurricane center. now upgrading isaac to a cassgory one hurricane. there you can see the aeptive path as except by our folks -- our partners over at the weather channel whom we want to show the intraday gas even as well? there it is. gasoline is lower by 5 cents. decline of 1 2/3%. not the same intraday chart, but remember, the fundamentals are different here because it's refining capacity that we're really worried about when it comes to isaac. joe. >> stay with the refiners. they have the fundamental tail wind.
we've said it over and over again. there's no change. >> all right. let's get a pit stop in here with jeff killburg as well. ceo and founder of killer capital. that's quite a name for a company. your thoughts on isaac here and what we're seeing with commodities? >> well, of course, like you just stated, they did upgrade to ato a category one, and right now we see them continue to build in the crude oil market. $100 targets certainly on the radar right now. traders behind me here in chicago are jittery about this spr release. it's strategic petroleum release. we don't foresee it, and i think you're going to see crude go up further to the north side. we're also going it see refiners being played. right now i'm feeling badly for all the folks down in new orleans. hopefully safety in shelters there. >> you're seeing they are anticipating? they're not? when we look at the intraday chart, clearly when president obama did not say anything about the spr, oil sold off. >> right. yesterday if you looked at early
in the morning when we found out about the hurricane gaining speed, it dropped $3 mshgs michelle, $97 approximate the 50 down to dallas $94.50. the more rewe dissect the spr, we really don't see how it's going to echttively translate into cheaper gas prices at the pump. therefore, there's a lot of political motives there, but i don't think the administration currently now is going to do that until we see the geomrukt tension overseas. they have to save their dry powder. >>. >> jeff, for your money right now, do you see that oil potentially has far more to the upside, or where is the threat right now for the price of oil, and would you be looking more at the refiners right now, or are you looking at some of those ingrated mamz? >> well, i like the refiners, but i think the he u.s. oil is a straight way to play it via the etf because i do see oil going up in that $100 threshold right now. there's so much momentum, and the risk-reward is to the up side. unfortunately, that's going to be translated to all the consumers at the pump because
right now we're approaching $4 and average national per gallon at the pump right now. $4 a gl later on. it's tough. >> all right. thank you. we're going to get down to scott who is in new orleans with more on this breaking news related to now hurricane isaac. scott. >> well, we knew that this was coming, michelle. tropical storm isaac now hurricane isaac, as you said, it is a little difficult to imagine as the sun peaks through the clouds on canal street in new orleans. that 75 miles off shore there is now a hurricane brewing in the gulf. it has slowed down according to the national hurricane center. now traveling just about 10 miles per hour. that gives it a little bit more time to strengthen over the warm waters of the gulf of mexico, but the fact that it's taken this long to turn into a hurricane perhaps gives it less time to strengthen before it comes ashore, which we expect landfall now probably late today, early tomorrow on the seventh anniversary of hurricane katrina. preparations still going on in
new orleans, and as i said, it doesn't look like a hurricane at this point here, and that's because a lot of the weather is on the back end of this storm, but sure enough, it is coming. >> you're right about it slowing down very drama wli. when i left last night, there was talk by this morning we would be saying that it had already come ashore, and now you're saying it's possible late tonight, maybe even early tomorrow morning. >> right. as i said, it's down about 10 miles an hour, and as of this morning it was 12 miles an hour. over the last few days it's been going through the gulf and upwards as high as 17 miles per hour, which maybe that doesn't seem like much, but it is a considerable slowdown when you think of the relative speed of this. that was somewhat expected. it starts, as i understand, it starts to get frukz with the coastal land, which also can help it strengthen. and, again, one of the things that has inhibited the storm is that there's been a fair amount
of dry air coming over clock-wise over the top of the storm that makes the leading edge dry. keeps it from intensifying. but keeps storminess on the back end of it. >> thank you so much, scott. >> you know, i'm not a weather forecaster because i actually have consequences if i'm wrong, which is different than what weather forecasters do, but brian kelly last night on the 5:00 p.m. show and the web extra which i know you and everyone else watches with consistency, talked about the potential good outcome here in the midwest. can you see significant rains that relieves some of the issues we're having in the grain market. just something to watch out for. >> all right. still ahead, the hurricane driving up diesel prices. what's that mean for transports? we're going to view winners and losers coming up on the halftime report. at merrill lynch, we understand the importance of your goals. today, our financial advisors lead from a new position of strength. together with bank of america,
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hedge fund manager john paulson facing his investors today during a conference call with bank of america's wealth management group. the call comes just days after citi private bank said it's yanking over $400 million from paulson's fund. kate kelly is here with what to expect. is he trying to hang on to more
money? >> absolutely. there's no secret that after enjoying some of the most impressive hedge fund returns of all time, john paulson has hit some tough spots. right? his assets under management have been slashed in half from over $30 billion at their peak to $19.5 billion right about now. interesting will he, though, redemptions have been limited so far, and bank of america's brokerage firm has of late expressed its support for paulson's funds. even issuing a later it that affect a few days ago. what's unclear is how the firm's brokers feel about that. a topic we'll get a better sense of at the abbing acall today. the call itself is ru toon. paulson briefs major platforms at least once a quarter on its performance in strategy. what questions arise under brokers potentially with angry clients will be informative. year-to-date paulson's flagship advantage fund is down 13%, and it's leverage sibling is down 18%. that's after a 2011 fall of 35% in the advantage fund. some money managers who hung in there after last year are now considering pulling investment, i'm told. at least one other major brokerage firm morgan stanley
has had paulson on watch for months, which could be a step towards removing the fund. it's complicated, though, because it could result in locking in investors losses. an issue that has created some tension, actually, around the citi decision. by leaving paulson intact, citi cleaves clients could have decided stay with paulson or not on their own, but by redeeming its $410 million of a process that will actually unfold starting in march of 2013 and finish over the course of a year, citi has essentially made that decision for them. if they want to invest with paulson, they have to go with some other platform. potentially some other bank. >> josh brown, you want to weigh in here? your thoughts? you're familiar with this portfolio, right? >> i know the portfolio. one thing that's interesting is really all of the country, even the ones that aren't invested, the one thing that consistently comes up is, look, we all understand that someone who generates huge alpha is also going to have the potential to miss sometimes. you can't be this tactical and
this concentrated and got them all right, and i think the bet that you're making if you stay loyal to paulson is that he is not a one-hit wonder, and you he can actually pull this on in different cycles and different types of markets. so far the evidence is scant, and when you work at bank of america, merrill, you have this menu of funds in front of you that you cannot believe how much different choices and opings they have. i think on the call there's not going to be that much frustration, but really more questions about, you know, what do you think of the cycle now and how do you want to invest going forward? >> josh, i think we're likely to hear a lot of focus on europe on the call today. something michelle knows a thing or two about. that's paulson's focus. i think you raise a good point as well, and if you defend paulson, you'll note this they have been phenomenally successful for some investors, so even in spite of 2011 if you were with them early on, you may be up 500% or more. >> all right. good point. kate, thank you so much. >> drivers aren't the only ones facing higher prices at the pump thanks to tropical storm isaac. diesel, which was already nearing three-month highs could
also move even higher. higher prices, what do they mean for road and rail stocks? let's bring in jason seidel. >> the trnts have been sketchy as it is. tell us what you think here in the wake of as we see rising gasoline and particularly diesel prices. >> well, you know, i think the first sector to look at is the truck load sector. that's been under pressure for a while. we've had some lackluster prici pricing. demand has been sluggish, and now diesel is rising as you brought that up. that's been up over 10% quarter to date, and most of the truck load carriers can't pass on all of it through the fuel surcharge. there's usually about maybe about 10% to 15% that they have to eat on top of that, you know, because it's been rising. these guys are seeing a lag effect going against them. what benefitted them in 2q will be a head wind here in 3q, and we could see numbers coming down. >> the impact from isaac, you assume it will stay? it's a short-term thing? do you ignore it assuming it's short-term? >> i think it's started to rise
before isaac. isaac, i think, is going to compound some things going forward, so we would not be surprised see numbers down on the truck load side, at least going into earnings. >> do you think that forces consolidation in the space? >> well, you know, the truck load sector is highly fragmented. it's been consolidated for decades. i think what you could see is some of the smaller carriers go up off the away side and the public carriers, the more sort of less leveraged with very good up-to-date fleets. those guys can benefit in the longer term. >> all right. thank you, jason. it was good to have you on. as we go to break, we want to show you a live picture coming out of louisiana. the governor there about to address people. we've just learned in the last ten minutes or so that isaac has been upgraded to a category one hurricane. it's no longer a tropical storm. it's stf shore and it has not made landfall yet, and the governor there well underway with preparations. very different situation compared to what we saw ahead of katrina. stay with "fast money" because on the way a major leader
dropping out of jackson hole. what is behind the european central bank head mario draghi's move. he is nott coming on saturday. why not? what's it going to mean for the eu euro? >> the move that could zap energy drinks. in particular monster. details coming up on the halftime report. [ "the odd couple" theme playing ] humans. even when we cross our "t"s and dot our "i"s, we still run into problems --
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coming up today on "power lunch" isaac's wrath. the storm barrelling towards new orleans on the anniversary of katrina. how prepared is the city this time around? and he is the man of the hour for the gop. we will handicap how well governor chris christie has done for his home state of new jersey. a state of the state straight ahead. and more encouraging news on housing. why a recovery may finally be underway. we'll see you at 1:00 p.m. eastern. now back to michelle and more. >> thank you so much. the euro rising today against the u.s. dollars president mario draghi cancels his appearance at jackson hole. what's behind the move? what does it mean for the currency? let's bring in boris, managing director at bk active management. we saw the euro rise on this idea that draghi wasn't coming. connect those two events pour me. >> i think there's a lot of speculation that draghi is not coming because he is working on a serious bond support program
in the ecb. in addition to that, we also have very -- relatively strong opings out of spain and italy. for example, spain three-month t-bills went off at below 1% for the first time in a long time. i think the market is looking at more comfort with the idea that perhaps a lot of this job money from the kre bcb is starting to work. that's giving europe a boost as we stand right now. i think you are seeing a different narrative going on. >> at some point does very to actually stop talking and actually do some action here to preserve this? >> exactly. i very much think so. they're going to have to come up with a serious bond support program of some sort of a monetary program in order to convince the market that's going to be happening. the other thing that's also interesting that happened is angela merkel is angling for this e.u. convention to create a essentially more proper institution in order to be able to go towards the idea of euro zone bonds, which is really what
everybody really wants. if they can combine the sovereign risk across the whole euro zone, that's going to be very positive. given the way the currency is trading, i think the short squeeze could go on further. for me the 126 level is really the critical level here. if we can break through 126 it's going to be a lot of short covering going forward, so i would lot of to be long if it breaks 126 with a first target of 127 and a stop around 124.50 and then see if we could employees to 129.50. everybody was expecting euro to collapse, and it's going the other way because the credit situation in the euro zone is starting to ease despite the fact that the economy in the euro zone is still very negative. >> good point. boris, thank you so much. good to see you. >> thank you. >> let's get to our poll of the day. why did mario draghi cancel his jackson hole appear yns? a, he was working on that big bond buying program next week? b, he had nothing to say. auto, what, malloy? this was supposed to be a secret. c, he has a date with me.
come on. please log to fast money.cnbc.com. >> i don't know if mario draghi is married or not. would you go on a date with him? >> i do like italians. >> he is very smart. >> hey, joe. >> let's look at twitter for what's trendsing. what are you seeing? >> michelle, last week of august people are saying good-bye to their summer houses and getting ready to come back to the city full-time. we asked the twitter dot si who right back positioning your portfolio? lewis says i'm raising cash, locking in profits ahead of labor day. jackson hole and any potential ecb announcement, and, lee tweeteded i'm sticking to blue chips like ibm as they bring enterprise products back to the markets, focus in on data, great leadership, by the way, and lastly, jack says buy puts while the volume is low, buy insurance if you can. not when have you to. what do the traders think with that, michelle? >> well, pete is always talking
about that. >> smart. all u first of all, the bluechips make a lot of sense. they've done an absolutely great job of prepareance. when you bring up the yp morgans and look at ibms and different names. look at the pharmaceutical names and protection. when you have volatility. do it before the storm, like in new orleans, you wouldn't want to buy your housing insurance now, two weeks ago, when the storm is not there, buy the protective puts. >> dr. j. >> and get alpha after that because you want exposure to the upside, go one put away to the s&p 500 and do 1x2 spreads. buying a put to secure that downside, like pete is saying, when you can and not have to and when the vol is cheap, you will be a happy camper. >> that 1x2 spread.
customers with their ads. what will that mean for energy and pepsi? >> this is interesting because beyond the health issues we will get to in a second, it talked to beverage digest, the editor has watched this industry a long time. he said something really interesting. that is the growth, the penetration, household penetration of energy drinks as a category is actually going down. it's flat lining at this point. he believes growth for the group as a whole will go down. now, you layer on top of that potential health issues. that becomes a possible problem you can look at it. what will really happen? anybody's guess. we have seen these concerns about health and energy drinks a long time. i have to tell you this. when you talk about pepsi, it's a rounding error. it means nothing when it comes to pepsi, owns amp and part of this. the bigger issue, does it become a political issue? senator durbin raised issues a
month or so ago but then the fda came out and said, you know, energy drinks don't have that much more caffeine than coffee. >> 60 milligrams per 16 ounces, and coffee is twice as much. >> you will be more handsome and thinner. >> there have been some deaths. maryland, the current investigation the "wall street journal" notes the new york attorney general appears to be investigating them, some people thought it would be maryland. there could be -- are other people looking at this state because there was a teen in maryland last year who died after drinking two 24 ounce cans of an energy drink. >> isn't the end game increasing the marketing scope and putting more warning labels on this and in essence, taking off the table in the case of -- >> labeling would seem to be something you would have at some point. the bigger issue is the growth. in the end, fundamental. >> in case of monster, the
i don't have to use gas. i am probably going to the gas station about once a month. drive around town all the time doing errands and never ever have to fill up gas in the city. i very rarely put gas in my chevy volt. last time i was at a gas station was about...i would say... two months ago. the last time i went to the gas station must have been about three months ago. i go to the gas station such a small amount
that i forget how to put gas in my car. ♪ we're looking for more ways to trade like a monster? join john and jerry september 21-22 in washington d.c., invest like a monster. final trades, josh. >> i like health care etf. above 39, she's gone. >> john. >> i like juniper. a lot of call buying in october. jmpr. >> we all talk about apple to nauseum, how about serious logic, call buying there, 60% of calls from apple going higher. that's going higher. >> we learned about europe, who played there. learned about your like for